Motor Vehicle Act and its Effect

The Parliament recently passed the Motor Vehicle amendment bill, 2019 overhauling the thirty year old law. This bill fits in with the UN defined target of reducing to half the number of global deaths and injuries due to road traffic accidents.

Urban mobility landscape is set to change with ride hailing companies. At present several states lack norms to regulate cab aggregators which has lead to questions of legality of bike taxis and ride sharing. With the amendments in place, the state government will need to work in accordance with Centre’s guidelines. As cab aggregators use technology as a platform, the law also requires them to comply with the provisions of the IT act, 2000.

One of the significant takeaways is the shift to specific regulatory polices being formulated. It is in line with global practices wherein aggregators have been accorded recognition. Other positives include bringing in of operational simplicity like recognition of digitised documents and clear demarcation of aggregators and drivers. Higher penalties for non-compliance of license conditions, requirements to comply with the IT Act and an increase in insurance costs can place more compliance burden on aggregators.

All in all the act seems to align with global practices, especially in the case of customer safety and protection of driver rights. It would be instrumental in brand value enhancement and sustenance of the new industry.


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